General University Reference Utility
Policy FN04 PETTY CASH AND CHANGE FUNDS
Policy Steward: Office of the Corporate Controller
To outline the University's policy on petty cash and change funds.
PETTY CASH FUNDS:
Petty cash funds are used for minor local purchases and other
expenditures (excluding postage stamps) which individually do not cost more
than $50.00. Purchases of this nature are made only if it is not practical to
obtain the items through the University purchasing procedures. A purchase (or
purchases) from a single source that exceeds the $50.00 limit may not be broken
up on separate receipts to avoid this limit. The University Purchasing Card
should also be used for the convenience of minor purchases. (Refer to Policy
Because of the distance involved from Mailing Services, non-University
Park locations may acquire postage stamps from their local Post Offices through
the Petty Cash funds or Operating Cash funds, using the
Petty Cash Expended form. Refer to procedure BS2008, University Mailing Services, for
information on postage stamps.
Change funds are used in cash register operations or other areas where
cash collections take place and the need for having change-on-hand exists.
ESTABLISHMENT AND TERM OF A FUND:
A petty cash, change fund or other advance may be established on a long term or short term basis. Funds established for an indefinite period of time should be recorded as a long term advance.
Funds may be established in two ways:
- Direct Custodian: As an advance to the petty cash or change fund custodian, who will obtain a temporary or long-term advance directly in their name, by processing a Special Request for Check, with appropriate approval from the custodian’s budget administrator and Financial Officer. The SRFC should credit:
- Short Term (temporary) Advances - Account 0206
- Long Term (permanent) Advances - Account 0207
- Sub-Custodian: As a Request for Cash Advance through the Financial Officer’s Operating Cash Fund. The custodian of the petty cash or change fund will be treated as a sub-custodian within the Operating Cash Fund.
CUSTODY OF A FUND:
The person to whom the petty cash or change fund is advanced is the
custodian of that fund. These funds are non-transferable. Another custodian may
be designated by:
- Direct Custody: Notifying the Bursar in writing to change the name of the custodian with approval from the Financial Officer, upon a full reconciliation of the change or petty cash fund signed by both the old and new custodians. Alternatively, the old custodian can close out their advance and the new custodian can open a new advance.
- Sub-custodian: Old custodian would close out the Request for Cash Advance and the new custodian would establish a new Request for Cash Advance with the Financial Officer.
Petty cash and change funds are to be kept intact and never
intermingled. Such funds must be kept in separate bags or lockboxes. They are not to be used for cashing employee paychecks or
personal checks. Petty cash and change funds are not to be used for making any cash advances.
It is the custodian's responsibility to make whatever provisions are
necessary to properly safeguard the fund.
Any amount of cash on hand that exceeds $1,000 must be maintained in a
vault or an approved safe (fireproof, bolted to floor or otherwise immovable). Amounts of $1,000 and under must be
maintained in a file safe or reinforced file cabinet with a pad lock and bar
that secures all drawers. Cash should not be retained in desk drawers or
standard file cabinets since they are easily accessed with nominal forcing or
readily available keys.
PETTY CASH EXPENDITURES:
Each petty cash expenditure must be supported by a Receipt for Petty
REIMBURSEMENT OF A PETTY CASH FUND:
Whenever the cash balance is low in the fund, reimbursement of the exact
amount of expenditures should be requested by submitting store / cash register
receipts to support proof of purchase and completed Receipt for Petty Cash
Expended forms, with a Special Request for Check (SRFC).
INCREASING A FUND:
- Direct Custodian: A Special Request for Check (SRFC) must be processed to increase a fund, with approval by the Financial Officer.
- Sub-Custodian: The open Request for Cash Advancemust be settled and a new Request for Cash Advance must be
processed for the new required total.
REDUCING A FUND:
A petty cash or change fund must be reduced when the total amount of the
fund exceeds the requirements of the area to which the fund has been issued.
- Direct Custodian: A Report of Cash Receipts (ROCR) must be processed debiting the appropriate advance fund, with approval of the Financial Officer, with copy to the Associate Bursar and notation of the name of the custodian in the notepad.
- Sub-Custodian: The original request is settled through the Financial Officer and a new Request for Cash Advance is processed for the reduced amount.
CLOSING A FUND:
All petty cash and change funds, whether they have been established for
a specific or indefinite period of time, must be returned when they are no
- Direct Custodian: A Report of Cash Receipts (ROCR) must be processed debiting the appropriate advance fund with approval of the Financial Officer, with copy to the Associate Bursar and notation of the name of the custodian in the notepad.
- Sub-Custodian: The original request is settled through the Financial Officer.
For questions, additional detail, or to request changes to this policy, please contact the Office of the Corporate Controller.
FN05 - Operating Cash Funds
Effective Date: August 12, 2014
Date Approved: August 12, 2014
August 12, 2014 (Editorial change, January 18, 2016)
Most Recent Changes:
- January 18, 2016 - Editorial change to the RESTRICTIONS section clarifying that petty cash and change funds must be kept in separate bags or lock boxes, to bring the policy in sync with Procedure CR2013 (Operating Cash Fund) verbiage.
Revision History (and effective dates):
- August 12, 2014 - Major revisions throughout the entire policy to reflect current handling of petty cash and change funds.
- September 25, 2013 - Editorial changes. Addition of policy steward information, in the event that there are questions or requests for changes to the policy.
- February 18, 2005 - Editorial change to eliminate "General Forms
Usage Guide" and correct bad links.
- September 27, 2002
- Account 0208 has been replaced by 0206.
- Petty Cash section updated to reflect current purchasing
- September 7, 2001 - Changed requirements for safeguarding cash to be
consistent with controls published in Policy FN01.
- February 7, 1995 -
- Allow non-University Park locations to purchase postage stamps
through petty cash and operating cash funds.
- Allow group meals to be reimbursed from the Financial Officer's
operating cash fund.
- A Request for Cash Advance form now used in place of Special
Request For Check form to establish funds.
- March 30, 1994 -
- Increased petty cash fund limit from $20 to $50.
- Can use petty cash funds to reimburse group meals and travel
expenses up to $50.
- Prohibits cashing of employee checks.
- Added Travel Expense Accounts and Request for Reimbursement for a
Group Meal forms to list of required forms.
- October 2, 1992 - Revised entire TERM OF A FUND section.
- March 25, 1992 - Substantial changes for editorial and form
- July 24, 1986 - Increased petty cash fund limit from $15 to $20.
- March 26, 1985 - Prohibited purchase from a single source from being
broken into smaller amounts to meet the $15 petty cash limit.
- July 27, 1983 - Location title change under ESTABLISHMENT OF FUND
- June 1,1982 - Consolidation of Policies CS-4 (September 29, 1978) and
CS-5 (October 22, 1980).